Beige Book Report: U.S. Economy Sees Gradual Growth

According to the latest U.S. Federal Reserve Beige Book report, the U.S. economy has exhibited modest expansion since late February.

Out of the 12 Federal Reserve districts, ten reported either modest or slight economic growth, representing an increase from eight districts in the previous report.

Employment also saw a slight uptick. Nine districts reported slow to modest increases in employment, while the remaining three noted no significant changes. Most districts experienced an increase in the labor supply and in the quality of job applicants. Skills shortages persisted, but wage growth rates have returned to historical averages recently.

Highlights from Federal Reserve Districts

Boston: Business activity expanded modestly, and overall employment remained stable. Employers in Cape Cod faced challenges in filling job openings. Software and IT employment saw a slight increase, while manufacturing employment remained flat or slightly decreased due to attrition.

New York: Economic activity in the New York district remained steady. Labor market conditions were described as solid, with slight employment growth and modest wage increases.

Philadelphia: Economic activity held steady in this district, with a slight increase in employment. Staffing and recruitment activities were constrained due to lower labor demand, and companies became more selective in their hiring processes.

Cleveland: Economic activity and employment both saw modest increases. Contacts reported improvements in worker availability.

Richmond: Economic growth slightly increased. Finding workers remained challenging, but some improvements were noted. Certain businesses hired workers regardless of open positions.

Atlanta: Economic activity moderately improved, although a few firms slowed hiring in response to weaker demand. Most firms reported easier recruitment but noted pockets of labor shortages. Automation investments were common among firms.

Chicago: Economic activity saw slight growth. Labor market conditions cooled with increased job applications per posting and better applicant quality.

St. Louis: Economic activity increased slightly, but employment remained unchanged. The labor market remained tight, particularly in rural areas.

Minneapolis: Employment grew slightly, although labor demand softened. Staffing firm contacts reported slower worker demand.

Kansas City: The economy expanded slightly, with a slight uptick in hiring activity. Mid-year wage increases were limited despite easing labor market tightness.

Dallas: Labor availability improved, and economic expansion was modest. Permanent hiring was preferred over temporary or contract workers, and wage pressures declined.

San Francisco: Economic activity grew at a modest pace, although future economic conditions were expected to weaken slightly. Some firms in technology and finance used layoffs and attrition to reduce workforces but deployed generative AI tools to augment rather than replace workers.